Ask HN: Monthly vs Annual - Subscriptions.
Trying to decide how to launch a subscription model for my web service. Monthly or Annual?
3 comments
http://37signals.com/svn/posts/753-ask-37signals-how-do-you-... is a good overview of what 37signals did. My experience mirrored theirs. Essentially, we wanted to offer annual billing, but when we went to our processor with that, they weren't willing to assume the risk associated with that. My understanding might be off, but I believe the rationale is that they're essentially guaranteeing that we'd be able to offer refunds to customers who didn't get what they paid for. So if someone pays $30 for a year's coverage of our software, and we go out of business three months into that, they're going to want their money (or, at least, part of it) back. But if we've gone bankrupt, the credit card processor is partly on the hook for that money.
The CC processor we use (www.braintreepaymentsolutions.com) {and I'm very happy with them} allowed us to apply for annual billing after we had many months (7? 8?) of billing under our belts, and they could see that we weren't super risky.
So, yeah. Look at different scenarios, but recognize that it might not be up to you at first, and adjust your expectations and projections accordingly.
The CC processor we use (www.braintreepaymentsolutions.com) {and I'm very happy with them} allowed us to apply for annual billing after we had many months (7? 8?) of billing under our belts, and they could see that we weren't super risky.
So, yeah. Look at different scenarios, but recognize that it might not be up to you at first, and adjust your expectations and projections accordingly.
I know people who have used paypal for annual subscriptions with no problem. However, monthly is the most popular option followed by a three month for a small discount.
Most credit card companies won't let you charge in advance for an annual service when you have no track record.
You're pretty much stuck with monthly, or charging yearly in arrears at this stage.
You're pretty much stuck with monthly, or charging yearly in arrears at this stage.
Why not both? Something like $10/month or $100/year.